Reflections of the CEO

COVID 19 | CMU Action Plan | CSDR | Shareholder Rights Directive

For those of you reading this in the northern hemisphere, you may have noticed that we saw the autumn equinox earlier on this week. As the balance between day and night begins to tip in favour of the winter season, I am struck by how much our lives have changed since we passed the same point on the way into the summer season during mid-March.

On 20 March, the UK went into nationwide lockdown, as we started learning about social distancing and shielding as well as seeing some of the more extreme effects on our wider society. Six months on, as the UK and other counties across Europe grapple with a so-called second ‘spike’ in infections, some might argue that the current situation bears many similarities to the position we found ourselves in earlier on in the year. If we accept that COVID-19 will be part of our society for the foreseeable future, it will be incumbent on governments to work on ways for us to live with the virus, and consider what a future state economy and society might look like.

With the attention of many national governments focussed on their evolving response to the pandemic, it is encouraging to see that the European Commission published a number of important policy initiatives this week, that will help define that forward looking agenda for the next three to five years. More specifically, we welcome yesterday’s publication of the Capital Markets Union (CMU) Action Plan that has laid out a clear aspirational path towards the creation of a truly single market for capital across the EU. The vision outlined in the Plan is to bring the value of an integrated single market to all Europeans, including giving consumers more competitive choice in respect of their savings and investments. Whilst the direction of travel associated with the CMU has been clear for some time, the Plan moves the debate further with intent from within the text to use the CMU as a catalyst for change in a number of areas that were previously the remit of other legislative regimes. For example, the detailed timeline Annex to the main Plan contemplates a targeted review of the Central Securities Depositories Regulation (CSDR) in 2021, as part of a drive to improve the provision of cross-border settlement services across the EU. Similarly, the Commission has also highlighted the need for better harmonisation of certain elements of the Shareholders Rights Directive II, with a proposal within the Plan to introduce an EU-wide definition of a ‘shareholder’. Interestingly, this should be achieved through the broader desire to engender better and more effective shareholder engagement. What I feel is different here, is that the Plan is being used to highlight previously disparate issues that would have been considered in isolation, to meet the broader objectives of the CMU.

We have long lived in a regulatory and policy world where the targets of our attentions and focus were localised and somewhat obvious; the big beats of SFTR and CSDR, as well as equally challenging areas such as SRD II. In the context of ISLA’s engagement with the regulatory community, we have made considerable strides in changing outcomes here, and have found common ground between the industry and the legislators’ objectives. This world is disappearing fast however. Digitalisation is sweeping away the traditional views of regulatory reporting, and the concept of the CMU is demanding new thinking. The timing and joint publication of both the Commission’s Digital Strategy as well as the CMU Action Plan are therefore no coincidence.

Given our focus and investment in the digitalisation and standardisation of securities lending markets, and as an association that advocates for the development of broadly-based and transparent financial markets, I am confident that we have an important part to play in helping to take this agenda forward.

As I begin to think about how our role is evolving, I will be exploring many of these themes in more detail during my remarks at the ISLA Annual General Meeting, which will be held virtually next Wednesday 30 September at 13.00 BST. If you are part of a member firm and have not received details, please email

Andrew Dyson, CEO

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